There is a general challenge offered to the field of engineering economics by the introduction of advanced technologies. A survey of the existing literature on evaluation of advanced manufacturing systems indicate that the traditional approaches are inadequate for the purpose. Typically new technologies require very high investments. The traditional approaches do not account for the significant but intangible benefits offered by new technology. In this paper, an attempt has been made to overcome the above deficiencies by presenting an approach to account for the justification of the manufacturing system. This is based on the analytic hierarchy process (AHP) and is capable of taking into account many intangible factors as well. The usefulness of the proposed approach is demonstrated through a case situation. Finally, some research directions for future work are identified.